X&Y Coreceived $4,000 in Payments from Clients for Services Billed in in a Previous

question 18

Multiple Choice

X&Y Co.received $4,000 in payments from clients for services billed in a previous month.What effect does this transaction have on the accounts under the accrual basis of accounting?

• A) Total assets increase by $4,000.
• B) Assets will increase by $4,000 and revenues will increase $4,000.
• C) Total assets will be decrease by $4,000.
• D) The net effect on assets is zero.

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Definitions:

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